In 2020, the COVID-19 pandemic ushered in an era of economic uncertainty on various levels. While all businesses are challenged with high inflation, labor shortages, and supply chain issues, the franchise industry has remained a key component to economic growth.
In a recent report, the International Franchise Association (IFA) has called 2023 “A Year of Moderation for Franchising” as businesses continue to navigate these changing times. Even so, the IFA also reported that “Establishment Growth” and “Employment Growth” are higher this year than pre-pandemic norms.
Fortunately, the franchise business model provides stability in difficult times as “50% of franchisees said they were better able to navigate inflationary pressures and other pandemic-era business challenges thanks to the support of their franchise network.”
Are you wondering if 2023 is the right year to purchase a franchise? The IFA’s annual report details the franchise sector’s performance in 2022 and provides an insightful outlook for 2023. Spoiler alert – things are looking good for franchising this year!
IFA Key Forecasts for 2023
- Overall Growth: It’s projected that franchise establishments will increase by almost 15,000 units, or 1.9%.
- Job Growth: With an addition of approximately 254,000 jobs, it’s forecasted that total franchise employment will grow by 3.0%.
- Output Growth: The total franchise output will go from $825.4 billion (2022) to $860.1 billion (2023), which represents a 4.2% increase.
- GDP Growth: It’s predicted that the franchises’ GDP will grow at a pace of 4.2%.
Reasons Franchising Is Key to Economic Recovery in 2023
There are several reasons why franchising will play a major role in the United States’ economic recovery.
Its Unique Business Model Serves as an Economic Catalyst
For starters, the franchise business model uniquely benefits the economy even in the midst of an economic downturn by offering the following:
- Opportunity – The structure and support that comes with buying a franchise gives prospective entrepreneurs a chance to own and operate their own business.
- Jobs – When new franchises are opened, this naturally adds jobs across the economic spectrum.
- Reputation – A franchise offers an established system, a well-known brand, and valuable insights from existing franchisees. This increases the chance of success for a new franchise business owner.
Offers People the Opportunity to Re-Enter the Workforce
As the labor market continues to slow in 2023, franchising offers retrenched workers an alternative path to re-enter the workforce. This gives people from all backgrounds the opportunity to make a living while also adding to the overall economy.
Listen to George Habbouche’s inspiring story about how FranNet helped him start a franchise business. He left his job after 27 years, but still needed to provide for his family. Franchising was the answer for him, and he hasn’t looked back.
Is 2023 Your Year to Start Franchising?
Interested in starting your own business but not sure if you should in today’s economy? Based on the market forecasts, 2023 is a great year to get started in franchising. This is because the franchise model offers stability and a chance to succeed at business ownership. Reach out to a FranNet consultant to get started. At no cost to you, we will provide the resources and guidance you need from start to finish. Schedule a free consultation today!